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Guest Post: ICD-10 changes included in IPPS proposal

Nancy and Benjamin

Nancy Cervi, RHIT, CCDS, and her pet puppy Benjamin.

By Nancy Cervi, RHIT, CCDS

On April 19, 2016 CMS posted the proposed IPPS update for fiscal year (FY) 2017 (effective October 1, 2016). Below is just a highlight of some of the coding/grouping changes.


Table 6A:   1,900 Proposed New Diagnosis Codes
Table 6B:   3,645 Proposed New Procedure Codes
Table 6C:   305 Deleted Diagnosis Codes
Table 6I.1:  82 Proposed Additions to the MCC List
Table 6I.2:  13 Proposed Deletions to the MCC List
Table 6J.1:  326 Proposed Additions to the CC List
Table 6J.2:  65 Proposed Deletions to the CC List

CMS link:

Table 6E:-Revised Diagnosis Code Titles for this proposed rule refer to a document containing the FY 2017 revised diagnosis code titles, as well as new diagnosis codes that have been finalized to date since implementation of the partial code freeze. This was made available in advance in response to requests from the health care industry.  Refer to:

This will bring the total number of ICD-10 codes as follows:

                             Proposed Total FY 2017
ICD-10-CM  71,558                 ICD-10 PCS  75,625

This proposed rule contains quite a few grouping changes in many areas due to replication issues reported in disparity between ICD-9 grouping and ICD-10 grouping. As a result, there are proposals to add multiple diagnosis and procedure codes to the major diagnostic categories (MDCs) for FY 2017. These changes are reflected in the proposed rule document as well as in Table 6.  Some of these areas are:

  • Pacemaker Procedures Code Combinations Methodology
  • Reassignment of Endovascular Thrombectomy of Lower Limbs
  • Transcatheter Mitral Valve Repair with Implant (proposal to collapse MS-DRGs 228, 229, and 230 from three severity levels to two severity levels by deleting MS-DRG 230 and revising MS-DRG 229.
  • Excision of Ileum and Jejunum (Reassigned to MS-DRGs 329-331)
  • Bypass Procedures of the Veins (Bypass Portal Vein to Lower Vein to MDC 5)
  • Removal and Replacement of Knee Joints (New Code Combinations to capture removal of a spacer and insertion of a new knee joint prosthesis)
  • Decompression Laminectomy (Reassign to MS-DRGs 028-030, 518-530)
  • Diagnosis of Lordosis moving from the secondary diagnosis list to logic for principal diagnosis list.
  • Pelvic Evisceration movement from code cluster for MDC 6 to MDC 13.
  • Angioplasty with open approach (Add to Grouping for MS-DRGs 047-039)
  • Excision of Abdominal Arteries
  • Excision of Retroperitoneal Tissue (Add to MS-DRGs 356-358)
  • Occlusion of Vessels (Esophageal Varices and Occlusion of Esophageal Vein))
  • Excision of Vulva, External approach (Add code 0UBMXZZ to MS-DRGs 746, 747)
  • Lymph Node Biopsy (Thorax)
  • Obstetrical Laceration Repair (Adding procedure codes to MS-DRG 774)
  • Operations on Products of Conception (adding procedure codes to correct fetal defects)
  • Other Heart Revascularization (Bypass procedures MS-DRG 228, 228)
  • Procedures on Vascular Bodies: Chemoreceptors
  • Repair of the Intestine (Add Codes for Large intestine and Colon)
  • Insertion of Infusion Pump/Device
  • Procedures on the Bursa (Division of Wrist Bursa and Ligament)
  • Procedures on the Breast (Repair, external approach)
  • Excision of Subcutaneous Tissue and Fascia
  • Should Replacement (Humeral Head with Synthetic Substitute)
  • Reposition (Vertebrae)
  • Bladder Neck Repair
  • R. Procedures to Non-O.R. Procedures (See Table 6)
  • Non-O.R. Procedures to O.R. Procedures (See Table 6)

Also in the proposed rule, we find the Medicare Code Editor (MCE) changes for age conflict, sex conflict, non-covered procedures edit, unacceptable principal diagnosis edit (removing diagnosis codes for live born infant born outside the hospital. (Z38.1, Z38.4, Z38.7). Be sure to review this section for other MCE changes as well.

Lastly, there were nine proposals for New Services & Technology Add-on Payment Proposals:

  1. MAGEC® Spinal Bracing and Distraction System (MAGEC® Spine)
  2. MIRODERM Biologic Wound Matrix (MIRODERM)
  3. Idarucizumab
  4. Titan Spine (Titan Spine Endoskeleton® nanoLOCK™ Interbody Device)
  5. Andexanet Alfa
  6. Defitelio® (Defibrotide)
  7. EDWARDS INTUITY Elite™ Valve System
  8. GORE® EXCLUDER® Iliac Branch Endoprosthesis (IBE)
  9. Vistogard™ (Uridine Triacetate)

Comments must be received by June 17, 2016.  You may (and are encouraged) to submit electronic comments on this regulation to: Follow the instructions under the “submit a comment” tab.

Editor’s note: Nancy Cervi, RHIT, CCDS, is Senior Member in Clinical Documentation for Nuance Communications Healthcare Division,  responsible for HIM Content Development with the Clintegrity Coding and Compliance product.

CMS limits audits related to new 2-midnight rule

Kimberly Anderwood Hoy Baker, JD, CPC

Kimberly Anderwood Hoy Baker, JD, CPC

by Kimberly Hoy Baker, JD, regulatory specialist for HCPro

On September 28, CMS held a special Open Door Forum on the 2-midnight rule (released in the fiscal year 2014 IPPS Final Rule) and its implementation, starting October 1, 2013. CMS declined to delay implementation of the inpatient status benchmark, but instead put in place a 90-day “implementation period” with a moratorium on audits with the exception of “probe and educate” reviews by  Medicare Administrative Contractors (MACs).
During the call, CMS referenced a written announcement dated September 26, in which the agency stated it will not permit Recovery Auditors to review cases with less than two midnights of inpatient care for the 90 days following the October 1 implementation date. During this time however, CMS has instructed the MACs to audit a probe sample from every hospital of 10-25 cases that had less than two midnights of care.
The probe audits will be done on a pre-payment basis, and if the hospital receives a negative determination on a case, the hospital will be able to rebill the case under the new Part B inpatient billing rules. Following the probe audit, the MAC will identify “issues” with the hospital’s cases and provide further education if necessary.  If no “issues” are identified, the MAC has been instructed not to conduct further reviews of cases with less than two midnights during that 90 day implementation period.
Editor’s Note: This article was originally published on the Revenue Cycle Institute Blog. Hoy is the director of Medicare and compliance for HCPro, Inc., a lead regulatory specialist for HCPro’s Revenue Cycle Institute, and the lead instructor for HCPro’s Medicare Boot Camp®-Hospital Version and Medicare Boot Camp®-Critical Access Hospital Version.

New inpatient admission rules present documentation challenges

How long do you think the patient needs to stay in the hospital?

How long do you think the patient needs to stay in the hospital?

Editor’s Note: For more information regarding 2014 IPPS changes and for a sample “2-Midnight” admission order worksheet look for the October edition of the CDI Journal.

The 2014 IPPS Final Rule includes new guidance on what constitutes medical necessity for inpatient admission. Although, the new guidelines will not be enforced until roughly the turn of the calendar year (CMS announced 90-day delay on September 26), providers are expected to use the next three months to become familiar with the new guidelines and incorporate key elements into their day-to-day workflow.

Previously, an inpatient admission was defined using a 24 hour benchmark as defined in Chapter 1 Section 10 of the Medicare Benefit Policy Manual. Dubbed the “2-Midnight Rule,” the guidelines now require a physician to document his/her reasonable expectation that the patient’s workup and care will take at least two-midnights in the hospital as a benchmark for inpatient admission.

The final rule introduced two key concepts that clinical documentation improvement specialists should take note of. Specifically, these consist of presumption and benchmark.

  • A 2-Midnight presumption of inpatient admission states that claims for inpatient services with lengths greater than two midnights after an admission order will generally be presumed to be appropriate for payment under Medicare Part A.
  • A 2-Midnight benchmark serves as guidance to admitting practitioners and reviewers when determining whether it is appropriate to admit a patient as inpatient versus observation.

In simple terms, a physician’s reasonable expectation needs clinical documentation in the record to support it. That documentation requires an inpatient order as well as explicitly outlined plan of care, clearly described reason for admission including nature of presenting problem(s) and working and/or definitive diagnoses, and plan for discharge.

Effective physician clinical documentation is essential to support medical necessity in clinical scenarios where initial physician expectations falls short—where the patient miraculously gets better and is discharged after day one. The rule does provide allowances for clinical scenarios such as a patient who expires, leaves against medical advice, or is transferred to another acute care hospital.

According to the rule, Recovery Auditors and other contractors will review the record and consider exceptions only if:

  1. The physician order for inpatient admission to the hospital and other required elements of the physician inpatient order certification are included in the medical record.
  2. The record contains medical documentation supporting the expectation that care would span at least two-midnights
  3. The clinical indicators regarding the patient’s condition support a decision that it was reasonable and necessary to keep the patient at the hospital to receive such care.

Additionally, CMS calls on its contractors to consider complex medical factors that support a reasonable expectation of the needed duration of the stay including:

  • The patient’s medical history and comorbidities
  • The severity of signs and symptoms
  • Current medical needs
  • The risk of an adverse event

A two-midnight stay does not imply the inpatient stay is, and of itself, medically necessary; instead it presumes appropriateness of the inpatient stay provided the clinical documentation throughout the record demonstrates the need or medical necessity for inpatient admission. In essence, while Medicare has clarified the presumption for inpatient admission, what has not changed is the categorical need for complete, accurate, and effective clinical documentation reflective of the physician’s clinical judgment, medical decision-making, thought processes and provisional diagnoses at the time of the decision to admit the patient as an inpatient.

As CDI specialists, it is incumbent upon us to understand the elements of an emergency room note, history and physical, consultant notes, and progress notes necessary to capture the physician expectation of a two-midnight stay that is reasonable and necessary.

In my next blog, I will share some thoughts and ideas on this very topic through analysis of two actual case studies where a hospital received a medical necessity denial for inpatient admission by the Recovery Auditor. In the interim, keep in mind clinical documentation from a perspective of requiring a 2-midnight stay as part of your daily duties and responsibilities of inpatient chart review, remaining cognizant of the fact you will encounter a plethora of cases undoubtedly lacking enough detail and substance to pass the litmus test.

In the meantime, here is some additional reading:

Stay tuned.

Coding changes offered in IPPS proposed rule

CMS offers IPPS proposal.

CMS offers IPPS proposal.

Editor’s Note: CMS released the Inpatient Prospective Payment System fiscal year (FY) 2014 proposed rule on Friday, April 26. ACDIS members received a full-length synopsis of the proposal via email earlier this week.

As usual, CMS plans to implement a Documentation and Coding Adjustment (DCA) this time of 0.8%, with hopes to continue adjustments through FY 2017 in order to recoup $11 billion as mandated in the American Taxpayer Relief Act of 2012. However, hospitals may see an overall net increase in payments of the same amount.

As always, some MS-DRG weights increased, while others decreased. Facilities should review the relative-weight change tables included in the proposed rule.

CC/MCC changes include adding diagnosis code 575.0 (acute cholecystitis) to the CC Exclusion List when reported as a secondary with principal diagnosis code 574.00 (calculus of gallbladder with acute cholecystitis without mention of obstruction).

CMS also proposes removing the following diagnosis codes from the CC Exclusion List for diagnosis code 440.4 (chronic total occlusion of artery of the extremities):

  • Atherosclerosis codes 440.20-440.32, 443.22, and 443.29
  • Aneurysm codes 441.00-441.03, 441.1-441.7, 441.9, 442.0, 442.2, 442.3, 442.9

The proposed rule does not include any revisions to the CC/MCC Exclusion List based on ICD-9-CM code changes.

CMS proposes moving stroke cases with ICD-9-CM code V45.88 (status post administration of tPA [rtPA] in a different facility within the last 24 hours prior to admission to current facility) as a secondary diagnosis from MS-DRG 066 to MS-DRG 065. CMS would change the title of MS-DRG 065 to Intracranial Hemorrhage or Cerebral Infarction with CC or tPA in 24 hours. Hospitals who receive patients undergoing a stroke-in-evolution who had tPA given at an outside facility demonstrated higher costs and lengths of stay in all stroke MS-DRGs without tPA (MS-DRG 64-66), particularly if there was a MCC.

“I am grateful that CMS proposes to allow hospitals accepting patients with stroke-in-evolution who receive tPA at an outside facility to have code V45.88, in essence to count as a CC if a CC is not otherwise documented,” says James S. Kennedy, MD, CCS, CDIP, managing director of FTI Healthcare in Brentwood, Tenn.

CMS proposes reassigning the following diagnosis codes from MS-DRG 794 to MS-DRG 795:

  • V64.00, vaccination not carried out, unspecified reason
  • V64.01, vaccination not carried out because of acute illness
  • V64.02,vaccination not carried out because of chronic illness or condition
  • V64.04, vaccination not carried out because of allergy to vaccine or component
  • V64.06, vaccination not carried out because of patient refusal

In addition, all of the diagnosis codes currently assigned to MS-DRG 794 would be added to the “only secondary diagnosis” list for MS-DRG 795.

To read the complete article, visit

Tip: Use IPPS data for your CDI program benchmarking

How will you measure your CDI program? The IPPS Final Rule contains some interesting reporting data which may help.

During a recent CDI Talk conversation, I alluded to data available in the CMS IPPS Final Rule that CDI specialists can use to benchmark their progress and compare their efforts against national norms. It may take a little digging, development, and analysis but such effort is worth it.

One drawback, however, is its lack of comparability to hospitals similar to one’s own. Another drawback is that the data represent averages—and who wants to only be average? When you use this data to compare your individual organization’s performance against the national norms, keep in mind that an effective CDI program should likely be above those national benchmark averages. I say this for two reasons: First, many hospitals don’t have any CDI efforts in place and others have meager or ineffective programs so one can suspect the national reporting average to be lower than what an effective CDI program might observe as “average” at its facility.  Secondly, best-in-class is never average. I believe we all want to be effective if not “the best” in our CDI practices. Despite these two drawbacks, the data is free and available to everyone, so why not take advantage of it?

The following analysis is based on the data contained in Table 5, Table 7A, and Table 7B. Table 5 is, of course, the MS-DRG table for fiscal year (FY) 2013. Tthe ICD-9-CM data used in Tables 7A and 7B is from FY 2011. The ICD-9-CM data is then pushed through the v29 grouper (FY12, Table 7A) and the v30 grouper (FY13, Table 7B). Both tables 7A and 7B’s primary purpose is to present data on length of stay (LOS) at different percentiles. It also provides the case volume across the entire Medicare data set for each MS-DRG. I used this table to forecast the possible impacts (assuming no changes in documentation) with the acute renal failure when it changed to a complication/comorbidity (CC) in 2010. (Read that article “CDI analysis can help facilities understand impact of MCC downgrade” on the ACDIS Blog.)

Since we have access to the DRG volumes and the DRG relative weights (RW), from Table 5, we can start to examine frequency, distribution, etc. So, let’s start slicing data. National discharge volumes equal 10,771,161 and the national case-mix index (CMI) equals 1.6045.

Let’s review some background before digging in deeper. Under the IPPS reimbursement system ICD-9-CM diagnosis and procedure codes are grouped into Major Diagnostic Categories (MDCs).  Most of these groupings are by body system; however, there are a few exceptions. The exceptions are the “pre-MDCs,” HIV, and multiple significant trauma. Each MDC is further subdivided into Medicare severity diagnostic related groups (MS-DRGs), which can be classified as medical or surgical based on the presence of an ICD-9-CM procedure code that is classified as requiring additional resources by CMS and, therefore, impacts the DRG payment. The most basic initial MS-DRG organization sorts DRGs into three groups: Medical DRGs, Surgical DRGs, and an odd group called “Pre” which largely consists of the most aggressive cases (transplants, heart machines, ECMO, etc.).

DRGs 3 and 4 are, of course, the rather heavily weighted DRGs for patients that received a trach but don’t have a primary head/neck diagnosis. These are likely the most widely occurring DRGs among the “Pre” group (at many more and smaller hospitals than transplants, etc.).

MS-DRG Type % of total cases




Surg Without DRG 3 or 4


Surg Without Pre


As an aside, note the very small difference in the percentage of total volume when eliminating DRGs 3 and 4: 0.2% of the total cases. Yet, in the table below, pulling out those few cases drives the CMI down for surgical cases by 0.0984 which is a 3.5% decrease.

Whenever I see an unexpected change (either up or down) in CMI, the first place I investigate the cause is in the general med/surg split and then the volumes of DRGs 3 and 4.  Then I look to see if there were any changes in service line volumes due to various possible factors, such as a short term change in physician staffing among certain higher weighted DRGs, a change in facility focus or operational capacity, as well as any significant market changes.

Why DRGs 3 and 4? For a hospital with CMI 2.0 and 1,000 discharges a month, just one less DRG 3 case a month will drive the CMI down 0.002, which is an 0.8% decrease. One case is easily lost in the weeds if your focus is looking at case volumes.


Number of Discharges





Surg without DRG 3 or 4


Surg without Pre



With such a disparity in CMI between surgical and medical cases, and considering the relatively small slice of all patients that surgical DRGs represent, using the total CMI as a metric for CDI effectiveness might be considered fraught with risk.

At first glance here are the specific types of the DRGs as far as influence of secondary diagnosis on the DRG assignment:

  All Med Surg
None 9% 11% 3%
Pair MCC 33% 34% 32%
Pair CC or MCC 3% 1% 8%
Triplet 55% 54% 57%

It is interesting to see where the volume variations between medicine and surgery are, specifically in the column for “None,” such as chest pain, TIA, and syncope, and the column for “Pair CC or MCC.” The volumes between the MCC pair and the triplet are similar for both medicine and surgical DRGs. However, as one can see below, the overall capture of secondary diagnosis is rather different between the medical and surgical DRGs. [more]

IPPS Final Rule includes some CDI related code changes

CMS chose not to include code 428.0 (congestive heart failure, unspecified) as a CC. That disappoints ACDIS Advisory Board member James S. Kennedy, MD, CCS, CDIP, managing director at FTI Consulting in Atlanta, because in some instances of acute heart failure, no systolic or diastolic heart muscle disease is present, such as in acute aortic or mitral insufficiency.

In other cases the treating physician or surgeon simply did not want to incur unnecessary healthcare spending to get an echocardiogram needed to determine whether the heart failure is currently systolic or diastolic.

“I estimate that 20% of concurrent CDI work is to clarify this very issue which, if classifying 428.0 as a CC was approved as requested, would have reduced the work and hassle involved in clarifying systolic or diastolic heart failure and improve hospital efficiency and cost which, in turn, could be passed along to the government,” Kennedy says.

CMS also finalized the move of code 584.8 (acute renal failure with a specified pathological lesion) from an MCC to a CC based on their analysis of MedPAR data. Although this move is a disappointment, it may result in official follow-up on the advice provided in the AHA’s Coding Clinic, 3rd Quarter, 2011, in which coders were instructed to report acute renal failure due to specified pathological lesions, such as lupus nephritis, to code 584.9 (acute renal failure, unspecified), instead of code 584.8 Kennedy says.

“Perhaps the Cooperating Parties will now revisit this advice and provide official follow-up that allows coders to use 584.8 when a physician links acute renal failure to a specified pathological lesion, such as lupus nephritis, acute glomerulonephritis, interstitial nephritis, or another renal pathology not covered in [codes] 584.5, 584.6, or 584.7, since 584.8 is no longer a MCC,” Kennedy says.

Kennedy is pleased that CMS included mild and moderate malnutrition as CCs. He would like to see ICD-10 embrace the recently published American Dietetic Association / American Society for Parenteral and Enteral Nutrition consensus statement on malnutrition that classifies this entity as “non-severe” and “severe” instead of “mild,” “moderate,” and “severe.”  View this reference at

CMS did not add any MCCs or delete any CCs.

CMS finalized a proposal to reassign cases with a principal diagnosis code 487.0 (influenza with pneumonia) and an additional secondary diagnosis code of certain pneumonia codes listed as a secondary diagnosis codes from MS-DRGs 193, 194, and 195 to MS-DRGs 177, 178, and 179.

Editor’s Note: This article was written by Michelle A. Leppert, CPC for HCPro Inc. Breaking News

IPPS final rule released

Editor’s Note: The following excerpt is from a CMS release published on August 1 regarding the Inpatient Prospective Payment System final rule.

On August 1, CMS issued a final rule that updates fiscal year (FY) 2013 Medicare payment policies and rates for inpatient stays at general acute care and long-term care hospitals (LTCHs). The final rule also implements key elements of the Affordable Care Act’s hospital value-based purchasing and hospital readmissions reduction programs.

Under the final rule, payment rates to general acute care hospitals will increase by 2.8 percent in FY 2013. CMS projects that total Medicare spending on inpatient hospital services will increase by about $2 billion in FY 2013 relative to FY 2012.

Hospital Readmissions Reduction Program that will reduce payments beginning in FY 2013 (for discharges on or after October 1, 2012) to certain hospitals that have excess readmissions for three selected conditions:  heart attack, heart failure and pneumonia. Today’s rule finalizes a methodology and the payment adjustment factors to account for excess readmissions for these three conditions.

The final rule strengthens the Hospital Value-Based Purchasing Program (VBP program) includes a new outcome measure to reduce central line-associated bloodstream infections.

ACDIS members will receive complete analysis of the IPPS Final Rule via email soon.

Comments regarding FY 2013 proposed IPPS rule due June 25

On June 11, the ACDIS Advisory Board submitted comments to CMS regarding proposed changes to the Medicare Hospital Inpatient Prospective Payment Systems (IPPS) and proposed fiscal year 2013 rates, as published in the May 11, 2012 Federal Register (CMS-1588-P). Its comments addressed changes including:

  • Protein-Calorie Malnutrition
  • Acute kidney failure with other specified pathological lesion in kidney
  • Influenza with Pneumonia
  • FY 2013 MS-DRG Documentation and Coding Adjustment (DCA)

CMS will accept comments on the proposed rule until June 25 and will respond to all comments in a final rule to be issued by August 1, 2012. Facilities can download a display copy of the proposed rule here.


CMS issues IPPS proposed rule for FY 2013

CMS released the 2013 IPPS proposed rule Tuesday night.

by Michelle A. Leppert, CPC-A

Inpatient acute care hospitals could see a 2.3% increase in payment rates under the fiscal year (FY) 2013 Inpatient Prospective Payment System (IPPS) proposed rule, released April 24. The 2.3% is a net update after inflation, due to improvements in productivity, a statutory adjustment factor, and adjustments for hospital documentation and coding changes.

In addition, the IPPS proposed rule contains provisions to strengthen the Hospital Inpatient Quality Reporting (IQR) Program and proposes new policies and measures for the Hospital Value-Based Purchasing (VBP) Program.

“If the goal is to reward excellence, hospitals have to ensure that their coders are up to speed with appropriate identification of complications and with [present on admission] POA indicators as well as the over-documentation issues that could lead to financial penalties,” says Robert S. Gold, MD, CEO of DCBA, Inc., in Atlanta.

CMS also proposes a methodology to calculate the readmissions adjustment factor for inpatient hospitals that could result in a 0.3% decrease in overall payments to hospitals.

Coding changes
As expected, there were few changes to the ICD-9-CM code set. CMS previously indicated that it would limit such changes to allow providers time to prepare for ICD-10 implementation previously slated for October of 2013 but now potentially delayed until October of 2014.

“Since we are proposing to use ICD-9-CM until October 1, 2014, it potentially adds another year of limited updates,” says Shannon E. McCall, RHIA, CCS, CCS-P, CPC, CPC-I, CEMC, CCDS, director of HIM and coding for HCPro, Inc, in Danvers, Mass.

For FY 2013, CMS proposes to reassign cases with a principal diagnosis code 487.0 (influenza with pneumonia) and a one of a list of pneumonia codes listed as a secondary diagnosis codes from MS-DRGs 193, 194, and 195 to MS-DRGs 177, 178, and 179. CMS proposes to make three additional codes complications and comorbities (CCs) and change one major CC (MCC) to a CC for FY 2013. It does not plan to add any MCCs or delete any CCs.

CMS proposes adding these diagnoses to the CC list:

  • 263.0, Malnutrition of moderate degree
  • 263.1, Malnutrition of mild degree
  • 440.4, Chronic total occlusion of artery of the extremities

It also is proposing to change the severity level of diagnosis code 584.8 (acute kidney failure with other specified pathological lesion in kidney) from an MCC to a CC.

“While I support many of their CC/MCC changes, such as making mild and moderate malnutrition a CC, I am saddened that CMS still refuses to make heart failure not otherwise specified a CC,” says James S. Kennedy, M.D., C.C.S., C.D.I.P., managing director at FTI Consulting in Brentwood, Tenn.

IQR proposed changes
The IQR program currently includes 72 quality measures. CMS has proposed reducing that number to 59 for the FY 2015 payment determination, and 60 for the FY 2016 payment determination.

Participation in the IQR program is optional, although those who choose not to participate receive a 2% reduction in the annual payment update. CMS proposes adding perinatal care and readmissions, including overall readmissions and readmissions relating to hip and knee replacement procedures to the IQR quality measures for FY 2013. In addition, CMS would also measure how well hospitals use a surgery checklist designed to reduce errors.

VBP proposed changes
Beginning in FY 2013 and continuing annually, CMS will adjust hospital payments based on how hospitals perform or improve their performance on a set of quality measures.

For the FY 2014 VBP Program, the proposed rule includes a new outcome measure that rewards hospitals for avoiding central line-associated bloodstream infections that can develop during inpatient hospital stays.

For the FY 2015 VBP Program, CMS proposes grouping and scoring measures in four domains—clinical process of care, patient experience of care, outcome, and efficiency. CMS also proposes adding a total of four new measures to the list.

Readmissions reduction program methodology
In the FY 2012 IPPS final rule, CMS began implementation of the Readmissions Reduction Program for three conditions:

  1. acute myocardial infarction (i.e., heart attack)
  2. heart failure
  3. pneumonia

CMS also finalized its definition of readmission as:

“occurring when a patient is discharged from the applicable hospital and then is admitted to the same or another acute care hospital within a specified time period [30 days] from the time of discharge from the index hospitalization.”

CMS also addresses these areas related to the program:

  • Adjustment factor (both the ratio and floor adjustment factor)
  • Aggregate payments for excess readmissions and aggregate payments for all discharges
  • Applicable hospital
  • Limitations on review
  • Reporting of hospital-specific information, including the process for hospitals to review and submit corrections

Additions to the HAC list
CMS proposes adding two conditions to the list of hospital acquired conditions (HACs) for 2013:

  1. surgical site infection following cardiac implantable electronic device (CIED)
  2. iatrogenic pneumothorax with venous catheterization

Inpatient facilities do not receive higher MS-DRG payments for patients with complications or major complications caused by the conditions on the HAC list. CMS plan to update the existing vascular catheter-associated infection HAC category by adding the following two codes:

  1. 999.32 (bloodstream infection due to central catheter)
  2. 999.33 (local infection due to central venous catheter)

CMS proposed adding pneumothorax associated with transbronchial biopsy several years ago, but it was not finalized, McCall says. This condition does seem to meet HAC the criteria of occurring commonly and can cause a significant increase in resource consumption in order to treat this condition, she says. It is also labeled as a complication and comorbidity. However, HACs must also be reasonably preventable, according to evidence-based research, and this has also kept other conditions, such as ventilator-associated pneumonia, off the list in the past.

The addition of the surgical site infections from CIEDs seems to follow along with the inclusion of other site infections already on the HAC list, especially given an increased focus on ensuring sterile environments to avoid contamination of a primary infection at the time of placement of such devices, McCall says.

Coding and documentation adjustment
CMS expects the FY 2013 proposed documentation and coding adjustment (DCA) to net an aggregate increase of 0.2%. The DCA was originally established at the time CMS implemented MS-DRGs. It was thought that due to the increased need for specificity, facilities would focus attention on improvements to documentation. The last two years, the DCA has resulted in a payment offset of -2.0% and -2.9%.

“In good news, the documentation and coding adjustment actually works in the provider’s favor this year, increasing reimbursement by 0.2%,” Kennedy says. “That’s a substantial increase from the previous years.”

Comment on the proposed rule
CMS will accept comments on the proposed rule until June 25 and will respond to all comments in a final rule to be issued by August 1, 2012. Facilities can download a display copy of the proposed rule here.

The proposed rule will appear in the May 11, 2012 Federal Register.

Editor’s Note: This article first appeared as a “Breaking News Alert” and was published on

Q&A: Where to find CC/MCC designations

You've got questions? Lynne's got answers.

Q: How do you know when a condition has a complication comorbidity (CC) or major CC (MCC) designation?

A: Initially, you’ll have to refer to the current fiscal year CC and MCC lists which are published as part of the Inpatient Prospective Payment System Final Rule by CMS, typically the first week in August. CMS lists CC/MCCs by codes, numerically, so every year I take CMS’ lists and reorganize them alphabetically, by condition, so non-coders will have an easier time finding what they need.

The new, FY 2012, CC and MCC lists (alphabetical) have been uploaded to the ACDIS web site in the Forms & Tools Library under “Policies, Procedures, Regulations, and Job Descriptions.” You must be an ACDIS member to access this link.  I have also uploaded a document showing the new CC and MCC diagnoses as well as the deleted/changed CC/MCC conditions in the same location.

Over time, you may consider developing your own “short list” of CC and MCC conditions to use for reference. After reviewing charts for several months, you will probably memorize the conditions you see most frequently, or if you are unit-based, consider developing lists for the types of patients you see: cardiac, respiratory, neuro, ortho, etc.